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Edge to Cut Jobs as Head Injury Drug Flops in Phase 3, Shares Tumble

For years, Edge Therapeutics has been building towards a crucial test of a drug meant to combat the potentially delayed effects of aneurysms and severe head injuries. The plan fell apart this morning: the company will shutter the study and cut its workforce because its experimental treatment, EG-1962, is likely to fail.

An independent committee has performed an interim analysis of the first 210 patients in a study called NEWTON 2. The trial was set up to test whether Edge’s (NASDAQ: EDGE) drug, an injectable, sustained-release form of the pill nimodipine, was better than nimodipine pills at treating a cerebral vasospasm, a potentially deadly delayed effect of an aneurysm. The main goal of the study is a statistically significant difference, after 90 days, on what’s known as the “Glasgow Outcomes Scale,” which assesses the function of people with brain injuries.

The committee told Edge to stop the study after concluding EG-1962 has a “low probability” of succeeding. The news is a crippling setback for Edge; EG-1962 is its only drug in human testing, and Edge planned to file for FDA approval if the study turned up positive.

Now the company will “assess the next steps,” but will likely “reduce the scope of its operations” and cut jobs to save cash, it said in a statement. Edge had $88.1 million in the bank as of Dec. 31.

Edge shares plunged more than 85 percent, to $2.32 apiece, this morning.